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Saturday, 31 December 2016

Worst is over for UAE property market | GulfNews.com

Worst is over for UAE property market | GulfNews.com:
"Increased jobs cuts across the UAE coupled with uncertainty in the macroeconomic environment were the main driving factors in the UAE’s property market in 2016, putting downward pressure on rents and sale prices.
In both Dubai and Abu Dhabi, sale prices and rents dropped in 2016, with prices in Dubai now around 15 per cent lower from their last peak, according to JLL, a property consultancy.
And while analysts expect to see further downside pressure in 2017, they believe the worst is over for the residential market."

'via Blog this'

Compliance in focus as Opec deal kicks off | GulfNews.com

Compliance in focus as Opec deal kicks off | GulfNews.com:
"Compliance to production cuts will be in focus as a historical deal between Opec (Organisation of the Petroleum Exporting Countries) and non-Opec member countries kickstarts on Sunday.
Opec members and countries from outside the group have agreed to reduce production by about 1.8 million barrels per day from January 1 to stabilise oil prices.
The 13-member Opec group would be cutting production by 1.2 million barrels per day, whereas non-Opec members led by Russia would be slashing output by 558,000 barrels per day.
"

'via Blog this'

Egypt court backs government in Red Sea islands dispute | Reuters

Egypt court backs government in Red Sea islands dispute | Reuters:
"An Egyptian appeals court on Saturday upheld an agreement to give control of two islands in the Red Sea to Saudi Arabia, providing a boost for the government in a case that has prompted rare street protests.

The territorial deal, announced in April, caused public uproar among many Egyptians who said the uninhabited islands of Tiran and Sanafir belonged to their country.

The case has become a source of tension with Saudi Arabia, which has provided billions of dollars of aid to Egypt but recently halted fuel shipments amid deteriorating relations."

'via Blog this'

Friday, 30 December 2016

Mideast funds see stocks rising in 2017; positive on Saudi budget | GulfNews.com

Mideast funds see stocks rising in 2017; positive on Saudi budget | GulfNews.com:
"Middle East fund managers have become more positive toward equities in the region as the new year begins because of higher oil prices and efforts by Gulf governments to cut their budget deficits, a monthly Reuters poll found.
The poll of 13 leading fund managers, conducted over the last week, found 62 per cent expect to raise their allocations to regional equities in the next three months and none to reduce them, the most bullish view of equities since February 2014, before oil prices began to plunge.
In last month’s poll, 43 per cent expected to increase their allocations to Middle East equities and 7 per cent to cut them."

'via Blog this'

Year in review: Why economic reform was the Middle East’s business story of the year | The National

Year in review: Why economic reform was the Middle East’s business story of the year | The National:

"GCC economies are at crossroads. The slump in oil prices since 2014 has affected the GCC countries in many ways. Unlike previous episodes of price collapse, the latest one is marred with ambiguity about its recovery and the demand dynamics going forward.

A new normal in oil prices is being formulated as we speak.

Countries have been compelled to accelerate structural reforms to diversify their economies away from hydrocarbons, boost the role of the private sector, and create jobs for their rapidly growing labour forces."



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Saudi Telecom Said to Work With JPMorgan on Options for Oger - Bloomberg

Saudi Telecom Said to Work With JPMorgan on Options for Oger - Bloomberg:

"Saudi Telecom Co. is working with JPMorgan Chase & Co. to evaluate options including increasing its stake in Turkish telecommunications investor Oger Telecom, according to people familiar with the matter.

The Riyadh-based firm could buy a stake in Oger Telecom from Saudi Oger, which holds 65 percent, to boost its current holding of 35 percent, said the people, who asked not to be identified as the information is private. Oger Telecom, which owns a majority in carrier Turk Telekomunikasyon AS, has been in negotiations with its lenders since one of its units failed to pay a loan installment of around $290 million due in September, the people said.

A potential sale of a stake in the company could help raise funds to make the payment, the people said. STC, as the Saudi firm is known, has not yet agreed to a deal and talks may fall apart, the people said. Representatives for STC, JPMorgan and Oger Telecom declined to comment."



'via Blog this'

UPDATE 1-Oman raises telecommunications firms' royalty payments in revenue push | Reuters

UPDATE 1-Oman raises telecommunications firms' royalty payments in revenue push | Reuters:
"Oman's telecommunications companies will pay a royalty to the government of 12 percent of revenues in 2017, the country's Capital Market Authority said in a bourse statement on Thursday, citing a letter from the Telecommunication Regulatory Authority.

That is an increase from the current 7 per cent royalty paid by Oman Telecommunications (Omantel) and Ooredoo Oman , the companies said in bourse statements.

The CMA said Oman's cabinet had decided to lift the rate for next year. Its state revenues strained by low oil prices, the government has been looking for ways to increase its income."

'via Blog this'

Saudi's PIF denies plans to buy stake in UAE's Utico | Reuters

Saudi's PIF denies plans to buy stake in UAE's Utico | Reuters:
"Saudi Arabia's Public Investment Fund (PIF), its top sovereign wealth fund, on Thursday denied that it was buying a stake in United Arab Emirates utility Utico.

"An official at the fund said that the news about entering into a binding agreement with Utico is baseless and unfounded." the official Saudi Press Agency (SPA) reported.

On Wednesday, Utico Chief Executive Richard Menezes told Reuters that the PIF had entered into a binding agreement with his company to buy a "significant minority stake"."

'via Blog this'

Oil down, but ends year with biggest gain since 2009 | Reuters

Oil down, but ends year with biggest gain since 2009 | Reuters:
"Oil prices settled slightly lower on Friday, the year's last trading day, but attained their biggest annual gain since 2009, after OPEC and partners agreed to cut output to reduce a supply overhang that has depressed prices for two years.

A two-rig rise in the oil rig count in the United States, the ninth weekly increase in a row, as reported by oilfield services provider Baker Hughes Inc (BHI.N), added to bearish sentiments.

But the total count of 525 for the week, the last for the year, was still below last year's level by 11 rigs."

'via Blog this'

Thursday, 29 December 2016

MIDEAST STOCKS-Gulf markets move sideways in early trade | Reuters

MIDEAST STOCKS-Gulf markets move sideways in early trade | Reuters:
"Gulf stock markets moved sideways in early trade on Thursday with few fresh incentives, after global bourses and oil prices lacked direction overnight.

Saudi Arabia's stock index edged down 0.1 percent in the first 20 minutes after profit taking in some second-tier petrochemical stocks which had surged on Wednesday. Petrochem continued climbing, however, adding 3.0 percent.

The banking sector index outperformed slightly, rising 0.2 percent after money supply data released late on Wednesday showed commercial bank deposits rose to their highest level this year in November - a fresh sign that a liquidity crunch due to low oil prices is easing."

'via Blog this'

EGA to expand operation in United States as American demand rises | The National

EGA to expand operation in United States as American demand rises | The National:
"Amid rising demand in the United States, Emirates Global Aluminium (EGA) said yesterday it is expanding its operations in America, where it has doubled its business volume over the past few years.

The move comes ahead of an expected shift in the political mood in the United States to a more protectionist stance when Donald Trump is sworn in as president next month. Mr Trump has pledged to revive American industry such as metals production at the expense of foreign manufacturers.


EGA, one of the world’s biggest aluminium producers, has opened a bigger office in St Louis in Missouri under the Dubal America name, after increasing its workforce five times since launching an office in 2014."

'via Blog this'

The emerging markets story will remain relevant | GulfNews.com

The emerging markets story will remain relevant | GulfNews.com:
"Casual observers might think that 2016 was a disappointing year for so-called emerging markets. In fact, some of these countries have delivered the year’s best investment returns, while certain developed-country markets have fared poorly.
If a UK resident who has personal obligations in Brazil had hedged all of his Brazilian real into sterling at the start of the year, he would have lost almost 50 per cent of his investment.
Indeed, Brazil is not the only emerging country whose markets performed better than expected in 2016. But this is easy to miss when, more than 15 years after I coined the BRIC acronym (Brazil, Russia, India, and China), people are still lumping a diverse range of countries into a single “emerging markets” category which confuses more than it illuminates."

'via Blog this'

Ten Best Saudi Stocks for Dividends, Picked by Aljazira Capital - Bloomberg

Ten Best Saudi Stocks for Dividends, Picked by Aljazira Capital - Bloomberg:
"With most Saudi Arabian stocks trading near their fair value, investors would do best to target companies set to pay the most in dividends in 2017, according to the equities team at Aljazira Capital.

The Riyadh-based securities firm selected 10 stocks to recommend for dividend investors, after assessing these companies’ cash position, spending plans, debt profile and the latest corporate and industry developments. The team of analysts is led by acting head of research Talha Nazar, whose recommendations outperformed the average among his Saudi Arabian peers in the past year.

The following are Aljazira’s selections, along with the reasons for their inclusion in the list prepared for clients:"

'via Blog this'

Saudi bank deposits rise in November as c.bank liquidates foreign assets | Reuters

Saudi bank deposits rise in November as c.bank liquidates foreign assets | Reuters:
"Saudi Arabian commercial bank deposits rose to their highest level this year in November, a sign that a liquidity crunch due to low oil prices is easing as the government liquidates foreign assets to pay its bills, official data showed on Wednesday.

Bank deposits climbed to 1.624 trillion riyals ($433 billion) from 1.610 trillion riyals in October, the fourth straight month-on-month gain, the central bank figures showed.

Deposits fell earlier this year as the government, its revenues shrunk by cheap oil, placed less money with domestic banks. At the same time, it covered part of a huge budget deficit by issuing bonds to the banks."

'via Blog this'

MOVES-Four senior staff depart National Bank of Abu Dhabi - sources | Reuters

MOVES-Four senior staff depart National Bank of Abu Dhabi - sources | Reuters:

"Four top managers at National Bank of Abu Dhabi (NBAD) are leaving the bank ahead of a merger with First Gulf Bank (FGB) to create one of the Middle East and Africa's biggest banks, according to sources.

Abdulla Mohammed Saleh AbdulRaheem, deputy group chief executive and Qamber al-Mulla, senior managing director and chief executive of Gulf and international, are both departing, the sources said.

Also leaving are Saif al-Shehhi, senior managing director UAE government group and VVIP clients, and Abdulla Bin Khalaf al-Otaiba, senior managing director and group head of global retail & commercial."



'via Blog this'

MIDEAST STOCKS-Gulf set to consolidate, Saudi money supply data is positive | Reuters

MIDEAST STOCKS-Gulf set to consolidate, Saudi money supply data is positive | Reuters:
"Gulf stock markets look set to consolidate on Thursday with few fresh incentives, as global bourses and oil prices have moved little over the past 24 hours.

Saudi Arabian money supply data released late on Wednesday was modestly positive, showing commercial bank deposits rose to their highest level this year in November - a fresh sign that a liquidity crunch due to low oil prices is easing.

This could encourage a modest rise by the Saudi stock index , which remains in short- and longer-term technical uptrends after this week's climb to a fresh year-high in active volume.

"

'via Blog this'

2017 in a minute: european equities

Wednesday, 28 December 2016

Brexit and the UK's role in 2017

Airbus forced to postpone delivery of 12 A380 jets to Emirates | Business | The Guardian

Airbus forced to postpone delivery of 12 A380 jets to Emirates | Business | The Guardian:
"Airbus has suffered yet another hitch in the troubled life of its A380 “superjumbo”, as it was forced to postpone delivery of 12 aircraft to its largest customer, Emirates.

The double-decker A380, the world’s largest passenger jet, has proved a disappointment for Airbus since its much-delayed debut in 2007 and the firm has already been forced to cut production after winning fewer orders than expected.

The latest obstacle to throw the €25bn (£21bn) aircraft programme off course has left analysts questioning whether executives at Airbus might consider cancelling it altogether."

'via Blog this'

First-half profit declines at Dubai sovereign fund ICD | The National

First-half profit declines at Dubai sovereign fund ICD | The National:
"The Investment Corporation of Dubai (ICD), with holdings in some of the emirate’s most strategic companies including Emirates airline and lender Emirates NBD, said yesterday its first-half net profit dropped by 23 per cent year on year as revenues from its oil and gas interests declined.

Net profit attributable to equity holders fell to Dh8.2 billion in the six months to June 30 from Dh10.68bn in a year-earlier, it said in a statement to Nasdaq Dubai.


Revenue declined by 7.8 per cent to Dh82.47bn from Dh89.47bn as earnings from oil and gas products and services declined 30.5 per cent to Dh19.43bn from Dh27.98bn a year-earlier. ICD’s holdings in the energy and industrial segment of its portfolio are in diversified energy company Enoc, cable manufacturer Ducab and Emirates Global Aluminium."

'via Blog this'

Saudi sovereign fund to buy stake in UAE firm | GulfNews.com

Saudi sovereign fund to buy stake in UAE firm | GulfNews.com:
"Saudi Arabia’s top sovereign wealth fund is buying a stake in UAE utility company Utico in a multi-million dollar deal, the chief executive of the UAE firm told Reuters on Wednesday. Public Investment Fund (PIF) has entered into a binding agreement with private utility provider Utico Middle East to buy a “significant minority stake”, Richard Menezes said. He declined to give the deal value, saying details will be published soon.
PIF has been looking at investments in Saudi Arabia and elsewhere across a range of sectors in recent months. It hired HSBC to advise it on a potential purchase of a stake in Riyadh-based ACWA Power, a developer and operator of power and water plants, sources close to the matter told Reuters in November."

'via Blog this'

MIDEAST STOCKS-Gulf trades mixed, second-tier Saudi petchems rise | Daily Mail Online

MIDEAST STOCKS-Gulf trades mixed, second-tier Saudi petchems rise | Daily Mail Online:
"Major Gulf stock markets were mixed in quiet trade on Wednesday although some second-tier Saudi petrochemical stocks rose sharply after oil prices climbed overnight.

The main Saudi index traded higher for much of the day but closed 0.2 percent lower as Saudi Electricity, which had risen after last week's state budget for 2017 promised to raise electricity tariffs, fell back 2.6 percent.

Petrochemical stocks were the top three gainers, with Petrochem up by its 10 percent daily limit, Chemanol gaining 8.5 percent and Sipchem adding 5.4 percent."

'via Blog this'

Iran's Gulf Ally Said to Signal Rapprochement With Saudi Arabia - Bloomberg

Iran's Gulf Ally Said to Signal Rapprochement With Saudi Arabia - Bloomberg:
"Saudi Arabia has received notification from Oman that it intends to join the Saudi-led anti-terror coalition, according to a person familiar with the matter, a sign that Iran’s closest ally in the region is ready to improve its ties with the kingdom.

The letter was sent by Oman’s defense minister to Saudi Deputy Crown Prince Mohammed bin Salman, the person said on condition of anonymity. Prince Mohammed will go to Oman in the coming weeks to pave the way for a visit by King Salman. The king’s trip would help re-establish security, military and economic cooperation, the person said.

Oman’s ties with Saudi Arabia and its allies in the Gulf Cooperation Council have been strained because of its close relationship with Iran, the kingdom’s biggest regional rival."

'via Blog this'

Gulf Navigation to expand its operations to settle debt | The National

Gulf Navigation to expand its operations to settle debt | The National:
"Gulf Navigation plans to invest at least US$950 million by 2020 to double its petrochemical fleet and expand operations in the Northern Emirates as the company expects to settle its legacy debts by next year, the chief executive said on Tuesday.

The Dubai-based shipping company will tap global fund providers to finance most of its investments through a "buy-to-lease" mechanism, whereby it will own the ships and then service the investments from the generated income, said Khamis Juma Buamim, declining to name the funds. It will also use other resources to finance its expansion plans.


"Some companies already want us to service their business so they are willing to inject money now to ensure this service is available when they start trading in our region," said Mr Buamim. "We will use part of our money, but that is only for infrastructure.""

'via Blog this'

The Key Takeaways From Saudi Arabia's Historic Budget - Bloomberg

The Key Takeaways From Saudi Arabia's Historic Budget - Bloomberg:
"Monica Malik, chief economist at Abu Dhabi Commercial Bank, discusses the key takeaways from Saudi Arabia's historic budget with Bloomberg's Yousef Gamal El-Din and Angie Lau on "Bloomberg Markets: Middle East." (Source: Bloomberg)"

'via Blog this'

TABLE-Qatar November trade surplus shrinks 8 pct y/y | Reuters

TABLE-Qatar November trade surplus shrinks 8 pct y/y | Reuters:
"Dec 28 Qatar's November trade surplus shrank 8.0
percent from a year earlier hurt by low natural gas and oil
prices, Ministry of Development, Planning and Statistics data
showed.
Exports of petroleum gases and other gaseous hydrocarbons
fell 12.2 percent to 11.64 billion riyals ($3.20 billion).

QATAR FOREIGN TRADE 11/16 10/16 11/15
Exports (mln riyals, FOB) 18,720 18,745 20,826
Imports (CIF) 9,090 11,042 10,354
Balance 9,630 7,703 10,472
DYNAMICS (pct yr/yr change in riyal terms)
Exports -10.1 -14.9
Imports -12.2 6.5
Balance -8.0 -34.0

NOTE: FOB - free on board, CIF - cost, insurance and freight.
Previous figures are slightly revised"

'via Blog this'

Oil prices edge down ahead of OPEC, non-OPEC production cuts | Reuters

Oil prices edge down ahead of OPEC, non-OPEC production cuts | Reuters:
"Oil prices edged down on Wednesday as the market waits to see how OPEC and non-OPEC members carry through on planned supply cuts in the new year.

International Brent LCOc1 crude futures were trading down 7 cents, or 0.12 percent, at $56.02 a barrel at 0722 GMT (2.22 a.m. ET) after closing the previous session up 93 cents.

U.S. benchmark West Texas Intermediate (WTI) crude oil prices CLc1 were down 8 cents at $53.82 per barrel after settling up 88 cents at $53.90 a barrel in the previous session."

'via Blog this'

MIDEAST STOCKS-Gulf bourses edge up in early trade, petchems buoy Saudi | Reuters

MIDEAST STOCKS-Gulf bourses edge up in early trade, petchems buoy Saudi | Reuters:
"Most major Gulf stock markets edged up in early trade on Wednesday in line with global bourses, as petrochemical producers led Saudi Arabia's bourse.

The Saudi index, which surged 1.3 percent on Tuesday to a new high for the year, climbed 0.3 percent in the first 15 minutes.

The petrochemical sector index added 0.5 percent after oil prices rose overnight. Relatively small companies in the sector outperformed, with Petrochem up 4.1 percent."

'via Blog this'

Year in a Word: MbS | #SaudiArabia

Year in a Word: MbS:
"(Acronym, proper noun) Mohammed bin Salman: Saudi Arabia’s deputy crown prince, defence minister, chairman of the council for economic and development affairs and chief of the royal court. The 31-year-old is favourite son of King Salman, who ascended to the throne in January 2015.

Diplomats like to abbreviate the names of Gulf leaders into acronyms. This year, MbS has dominated, eclipsing MbN (Muhammad bin Nayef, the Saudi crown prince), MbZ (Abu Dhabi crown prince Mohammed bin Zayed) and MbR (Dubai ruler Mohammed bin Rashid).

The prince’s elevation to the heart of Saudi policymaking means he is a major influence over foreign policy, from the proxy war against Iran-allied rebels in Yemen, to eleventh-hour interventions at Opec, the oil producers’ cartel."

'via Blog this'

Tuesday, 27 December 2016

Oil in 2016: the return of Opec

Oil in 2016: the return of Opec:
"After a two-year experiment with free markets, the pain of low oil prices forced the world’s biggest producers to join forces in 2016 and tackle a global supply glut.

Saudi Arabia-led Opec and non-member countries, primarily Russia, agreed after months of discussion and back channel diplomacy to cut production for the first time since the global financial crisis.

Prices look set to end the year in the mid-$50s — about double the 13-year intraday low of $27.10 a barrel Brent touched in January — with hedge funds more bullish on oil than they have even been. A growing number of analysts and investors believe the cuts will reduce stockpiles, bringing supply and demand into balance more quickly next year."

'via Blog this'

Tadawul closes at highest level since December 3 last year | The National

Tadawul closes at highest level since December 3 last year | The National:
"Saudi Arabia’s index rose to its highest point for the year as the market continued to react to news of the country’s lower than expected budget deficit.

The Tadawul All Share Index closed up 1.27 per cent on Tuesday at 7,257.17 – its highest since December 3 last year – as investors continued to react to last week’s news from the Saudi finance ministry that the government would post a deficit of 297 billion Saudi riyals (Dh290bn) for this year, 9 per cent lower than its initial estimate for the year and an 19 per cent reduction on 2015’s record shortfall.


It was led by gains from the car company Saudi Automotive Services and the advertising company Tihama."

'via Blog this'

Meydan Group secures Dh1b financing from Adib | GulfNews.com

Meydan Group secures Dh1b financing from Adib | GulfNews.com:
"The master-developer Meydan Group has secured a Dh1 billion financing from Abu Dhabi Islamic Bank (Adib) that would go to part-finance projects that will line up along the Dubai Water Canal and for general corporate expenditure. There are about 15 to 20 prime plots that the developers of the Canal — Meydan and Meraas — have right on the water-side, extending from the Safa Park all the way through Jumeirah and the sea.
Meydan intends to develop the plots it owns for a soon-to-be-expanded leasing portfolio. These properties will have some of the most coveted sites in Jumeirah, boosted in no part by proximity to the water’s edge. “None of the Canal plots on the Safa Park side of Shaikh Zayed Road have been released — what have been announced are from private developers on the other side of the Rod,” said a top official with Meydan.
“We should have details about how the properties on our plots will shape up in 2017, most likely in the second half.” (Currently, less than 10 per cent of the Meydan revenue stream is made up of its leased portfolio.)"

'via Blog this'

Abu Dhabi to Permit Short Selling in Attempt to Boost Liquidity - Bloomberg

Abu Dhabi to Permit Short Selling in Attempt to Boost Liquidity - Bloomberg:
"Abu Dhabi is poised to introduce services facilitating short-selling next year as it seeks to boost trading volume and attract foreign investors to the illiquid market.

ADX, as the local exchange is known, is conducting meetings with brokerages in the United Arab Emirates ahead of introducing a so-called technical short-selling service early in 2017, according to a statement posted on the bourse’s website on Monday. The step would make Abu Dhabi the first stock market in the six-nation Gulf Cooperation Council to permit the sale of securities owned by another investor.

Boosting liquidity in share trading is one of the biggest challenges for local regulators and stock exchanges in the Gulf. Since the start of 2015, the stocks of at least half of the 62 members comprising the ADX General Index have finished each trading session unchanged."

'via Blog this'

UPDATE 1-Kuwait's NBK, KAMCO invited to participate in Kuwaiti sovereign bond issue | Reuters

UPDATE 1-Kuwait's NBK, KAMCO invited to participate in Kuwaiti sovereign bond issue | Reuters:
"National Bank of Kuwait (NBK) , the Gulf Arab state's largest commercial lender, and investment firm KAMCO said they had been invited by the public debt office at the Kuwaiti ministry of finance to participate in a bond issue by the government.

A request for proposals has been sent to NBK's subsidiary NBK Capital to help arrange a sovereign U.S. dollar-denominated bond issue, and the deadline to respond is Jan. 5, NBK said in a bourse statement on Tuesday. The request is under study, it added.

Finance Minister Anas al-Saleh said in July that the government planned to sell as much as $10 billion of U.S. dollar-denominated conventional and Islamic bonds in international markets to help plug its budget deficit for the current fiscal year, which will end on March 31. "

'via Blog this'

MIDEAST STOCKS-Banks boost Saudi to high for year, rest of Gulf sluggish | Daily Mail Online

MIDEAST STOCKS-Banks boost Saudi to high for year, rest of Gulf sluggish | Daily Mail Online:
"Banking shares boosted Saudi Arabia's stock index on Tuesday to its highest level this year, while other Gulf markets moved little in quiet trade with some foreign investors absent for New Year holidays.

The Saudi index closed up 1.3 percent at 7,257 points in its highest trading volume for two weeks, rising above technical resistance at this year's previous peak of 7,235 points hit in early December.

The banking sector surged 1.8 percent as the biggest lender, National Commercial Bank, climbed 2.1 percent. Banks underperformed the market in the initial reaction to the 2017 state budget at the start of this week, when activity focused on other sectors including petrochemicals."

'via Blog this'

Oil rallies in thin trade, adds to year's gains | Reuters

Oil rallies in thin trade, adds to year's gains | Reuters:
"Oil gained 1.5 percent Tuesday, continuing its year-end rally with support from expectations of tighter supply once the first output cut deal between OPEC and non-OPEC producers in 15 years takes effect on Sunday.

U.S. crude prices have surged 25 percent since mid-November, helped by expectations for OPEC's supply cut and generally solid U.S. economic figures that have also bolstered equity prices.

Trading was thin on Tuesday as just 257,000 front-month futures contracts traded, less than one-half of the usual volume in West Texas Intermediate crude futures. With oil near $54 a barrel, U.S. crude is not far from the year's high of $54.51 high reached on December 12."

'via Blog this'

Brent curve signals oil tanks will start emptying in second half of 2017: Kemp | Reuters

Brent curve signals oil tanks will start emptying in second half of 2017: Kemp | Reuters:
"OPEC and non-OPEC oil producers have agreed to reduce their combined output by more than 1.7 million barrels per day for six months from January 2017.

But the agreement contains a provision that it can be extended for a further six months, subject to market conditions.

Oil traders are betting on an extension, with most of the rebalancing of the oil market expected to occur in the second half of 2017."

'via Blog this'

MIDEAST STOCKS-Gulf barely moves in early trade | Reuters

MIDEAST STOCKS-Gulf barely moves in early trade | Reuters:
"Gulf stock markets barely moved in thin, early trade on Tuesday with some foreign investors absent for New Year holidays and few fresh cues from corporate news or global markets.

Saudi Arabia's index edged up 0.1 percent to 7,172 points in early trading. It faces technical resistance at this year's peak of 7,235 points.

Saudi Electricity, which had risen on Sunday after Riyadh's 2017 state budget promised power tariff hikes later this year, pulled back, losing 2.0 percent."

'via Blog this'

Monday, 26 December 2016

Year in review: NBAD-FGB merger to set tone for UAE banking sector in 2017 | The National

Year in review: NBAD-FGB merger to set tone for UAE banking sector in 2017 | The National:
"UAE banks didn’t have the best of years in 2016 amid an oil-inspired economic slowdown but a successful completion of the merger of National Bank of Abu Dhabi and First Gulf Bank, the country’s biggest lenders, in the first quarter of next year will be a watershed moment.

For years high oil prices made the crowded sector, with more than 50 banks, viable as the country was flush with cash but a reversal in the direction of the price of oil in summer 2014 has put a dent in the status quo. The merger of the two institutions, one which is strong in corporate lending and the other in servicing individuals, is expected to come with a host of cost benefits and may set a trend for other lenders to follow.


Investors have by and large hailed the combination, especially as NBAD is considered one of the safest banks in the world, and its high credit ratings will allow it to borrow money cheaply on behalf of the new entity, which will have assets of US$178 billion, making it one of the largest in the Middle East and North Africa."

'via Blog this'

Year in review: Abu Dhabi Global Market spreads wings with the right international partners | The National

Year in review: Abu Dhabi Global Market spreads wings with the right international partners | The National:
"Three years after its founding by federal decree, Abu Dhabi Global Market really started to find its feet in 2016.

The free zone’s first full year of operations – having officially ­declared itself open for business in October 2015 – led to ADGM spreading its wings internationally, with a series of agreements with key international regulators.

The centre launched a major push to attract fintech entrepreneurs and also unveiled new regulations to bring in aircraft financing companies.


"

'via Blog this'

Abu Dhabi bourse to introduce short-selling in first quarter 2017 -CEO | Reuters

Abu Dhabi bourse to introduce short-selling in first quarter 2017 -CEO | Reuters:
"Abu Dhabi's stock market plans to introduce covered short-selling in the first quarter of 2017, its chief executive said on Monday, as it seeks to boost liquidity and attract more foreign investors.

In covered short-selling, investors borrow shares and sell them in the expectation of repurchasing them later at a lower price.

Regulators in the Gulf have until now shied away from allowing the practice because of concern that it could destabilise markets, though some countries including Saudi Arabia and Qatar have said they plan to introduce it."

'via Blog this'

MIDEAST STOCKS-Saudi post-budget rally stalls, UAE bourses firm | Reuters

MIDEAST STOCKS-Saudi post-budget rally stalls, UAE bourses firm | Reuters:
"The Saudi Arabian stock market's post-budget rally ran out of steam on Monday as the index neared technical resistance, while United Arab Emirates bourses outperformed the region.

The Saudi index added 1.5 percent on Sunday in reaction to Riyadh's modestly expansionary state budget for 2017. But it closed 0.3 percent lower at 7,166 points on Monday in lower trading volume. Technical resistance lies at this year's peak of 7,235 points, hit earlier this month.

Utility Saudi Electricity, which jumped 8.7 percent on Sunday after the government said in the budget that it would raise domestic fuel and electricity prices by unspecified margins later this year, fell back 2.6 percent.

"

'via Blog this'

Hindsight Capital 2016: Part Two

Hindsight Capital 2016: Part One

Gulf bourses gain ground in early trade | The National

Gulf bourses gain ground in early trade | The National:
"The Saudi Arabian stock market’s post-budget rally lost steam early on Monday as the index neared a technical resistance, while other major Gulf bourses were firm in quiet trade.

The Saudi index added 1.5 per cent to 7,191 points on Sunday in reaction to Riyadh’s modestly expansionary state budget for 2017.

But it faces technical resistance on this year’s peak of 7,235 points, hit earlier this month, and edged down 0.1 per cent to 7,181 in the first 20 minutes of trading on Monday."

'via Blog this'

Sunday, 25 December 2016

#UAE government bank deposits rise again after tracing lows | The National

UAE government bank deposits rise again after tracing lows | The National:
"Government bank deposits rose by 8.3 per cent last month, according to the latest figures from the Central Bank of the UAE.

The amount of money deposited by the Government last month increased to Dh172.9 billion – up from Dh159.6bn in October as oil prices staged an end-of-year surge.

November’s increase came after the amount of money the Government deposited in the Central Bank dipped to its lowest level in seven months in October, broadly following oil price fluctuations."

'via Blog this'

Tough road ahead for Saudi Aramco IPO plans | The National

Tough road ahead for Saudi Aramco IPO plans | The National:
"Saudi Aramco’s planned initial public offering has a tough road ahead of it amid a shifting political landscape in the United States. The uncertainties over how policies pursued by Donald Trump, when he becomes president, might affect Saudi’s oil interests, including the sale of a 5 per cent stake in its state oil company, were underlined by Saudi Arabia’s hectic efforts to lobby for changes to a law that could leave the government and its entities open to civil lawsuits. At the same time, a top Trump oil adviser urged the administration to block Saudi ownership of refining assets, arguing that it runs counter to the national interest.


"The potentially biggest IPO in history [of Aramco] is likely to be fraught with challenges and insiders continue to highlight that sorting these out could take a few years," Amrita Sen, the chief oil analyst at Energy Aspects, a consultancy, has said.

Adel Al Jubeir, Saudi Arabia’s foreign minister, has been lobbying intensely in the US this past month for lawmakers to amend the Justice Against Sponsors of Terrorism Act (Jasta), which in September overrode a presidential veto and gave US citizens the right to bring civil lawsuits against Saudi Arabia on behalf of victims of the September 11, 2001 terrorist attacks."

'via Blog this'

UAE better positioned for structural reforms among GCC countries | GulfNews.com

UAE better positioned for structural reforms among GCC countries | GulfNews.com:
"The UAE is making serious attempts to reform its economy and public finances to adjust to the new reality of lower oil prices, and the country has a head start in reforms in terms of economic diversification and larger role for private sector in the economy, said Senior Citi executives.
“There have been efforts at consolidation, be it in the financial sector, in the public sector or the oil sector. This is all in the agenda of driving efficiency and dealing with the new lower levels of commodity prices,” said Elissar Farah Antonios, Citi CEO, UAE.
The UAE is the most diversified economy within the GCC, and thus has been the least vulnerable to the low oil price environment of the past two years. Among the emirates, Abu Dhabi has been in the forefront of fiscal and other economic reforms last year as it bears the greater impact of lower oil prices."

'via Blog this'

Saudi paper retracts Aramco 49% stake sale plan story | GulfNews.com

Saudi paper retracts Aramco 49% stake sale plan story | GulfNews.com:
"The Riyadh-based newspaper Al-Eqtisadiah retracted a story saying Saudi Arabia is planning to sell almost half of Saudi Arabian Oil Co., the world’s largest oil company known as Aramco.
The stake that the government plans to sell and the time frame of the sale are different than what was mentioned in the story published on Saturday, al-Eqtisadiah said in a statement published Sunday. The story, which cited an unidentified government official, contained a number of other errors, the newspaper said.
“Al-Eqtisadiah apologises to its readers, and wishes that all media outlets that cited the story to publish this apology and clarification,” the newspaper said. It will start an investigation into how the mistaken information was published, the newspaper said."

'via Blog this'

Why Barclays CEO Staley Opted for War When Dimon Chose Surrender - Bloomberg

Why Barclays CEO Staley Opted for War When Dimon Chose Surrender - Bloomberg:

"When the U.S. was seeking a record-breaking payment from JPMorgan Chase & Co. for the sale of toxic mortgage-backed securities three years ago, Jamie Dimon went to Washington to sit down with Eric Holder, then the attorney general. Dimon, normally an outspoken critic of regulatory overreach, sought to make peace.

“I didn’t go pounding the table,” the JPMorgan chief executive officer recalled later in a Bloomberg Television interview. “I said, Eric, I’m here to surrender. You’re my judge and my jury. I have no choice.” A month later, the two sides reached a $13 billion settlement."



'via Blog this'

Expat Fee, Subsidy Cuts: What’s in Saudi Arabia’s Fiscal Balance Plan? - Bloomberg

Expat Fee, Subsidy Cuts: What’s in Saudi Arabia’s Fiscal Balance Plan? - Bloomberg:
"Saudi Arabia followed a historic budget announcement last week with an 84-page document outlining how the Arab world’s largest economy plans to balance its budget by 2020. The document includes plans to curtail capital spending, raise new revenue and stimulate the private sector.

Following are highlights of what caught our attention:

Capital Expenditure:

Authorities reviewed projects with a total cost of 490 billion riyals ($131 billion) under the five civilian ministries with the highest capital spending. Of the total, 270 billion riyals had already been spent and the revision identified potential savings of 100 billion riyals.

An investor guide to the highlights of Saudi Arabia’s budget

The next phase will see the government examining capital spending at 13 entities with a total cost of about 1.18 trillion riyals. To control the costs of projects, the government is creating a strategic procurement unit.

Subsidy Reforms:

Additional subsidy cuts will involve a steady change in energy and water prices from 2017 to 2020. This is expected to help the kingdom save 209 billion riyals annually by 2020.

The government is looking to increase prices of local retail fuel by linking them to benchmark oil prices or to the average of gasoline and diesel fuel prices on the international market. Prices will change according to fluctuations in the international market and they will be revised periodically.

"

'via Blog this'

UAE's Etisalat, Saudi's Mobily discuss new alliance after ending management deal | Reuters

UAE's Etisalat, Saudi's Mobily discuss new alliance after ending management deal | Reuters:
"United Arab Emirates telecommunications conglomerate Etisalat said on Sunday that its management agreement with Saudi Arabian affiliate Mobily had expired and the companies were working on a new arrangement.

Etisalat, which owns 27.4 percent of Mobily, helped to found the Saudi company more than a decade ago and has played a major role in its management.

But Mobily has been hit by controversy in the last couple of years after it restated 27 months of earnings to March 31, 2015, citing accounting errors due to premature booking of revenue from a promotional campaign. The restatement slashed Mobily’s total profits by 3.63 billion riyals ($968 million)."

'via Blog this'

MIDEAST STOCKS-State budget boosts Saudi, rest of Gulf sluggish; Egypt drops | Reuters

MIDEAST STOCKS-State budget boosts Saudi, rest of Gulf sluggish; Egypt drops | Reuters:
"Saudi Arabia's stock market rose sharply on Sunday in response to the release of the 2017 state budget, which includes an increase in government spending, while other major Gulf bourses were sluggish and Egypt retreated on profit-taking.

The Saudi stock index added 1.5 percent to 7,191 points, nearing technical resistance on this year's peak of 7,235 points, hit earlier this month. Trading volume rose to its highest in over a week.

Financial analysts generally welcomed the budget as balancing the need to continue cutting Saudi Arabia's fiscal deficit with support for economic growth. But many said it would not avert a further slowdown next year from the 1.4 percent gross domestic product growth in 2016."

'via Blog this'

Record Saudi Bond Sale Was a Start. Here Is What’s Next - Bloomberg

Record Saudi Bond Sale Was a Start. Here Is What’s Next - Bloomberg:
"Saudi Arabia laid out key elements of its borrowing plans for 2017 as the kingdom seeks to capitalize on investor demand for its debut sale this year to finance the budget deficit.

The world’s biggest oil exporter plans to raise between $10 billion and $15 billion from international bond markets, Mohammad Al Tuwaijri, secretary-general of the Finance Committee at the Royal Court, told Saudi-owned Al Arabiya television. Authorities will sell about 70 billion riyals ($18.7 billion) locally, he said.

Officials from Saudi Arabia have met with banks to discuss the potential sale of Shariah-compliant bonds in the first quarter, according to five people familiar with the matter. Saudi Arabia raised $17.5 billion in October in the biggest ever emerging-market bond sale, attracting $67 billion of bids, people familiar with the sale told Bloomberg at the time."

'via Blog this'

Saudi's Mobily and UAE's Etisalat agreement ends-statement | Reuters

Saudi's Mobily and UAE's Etisalat agreement ends-statement | Reuters:
"Saudi Arabia's Etihad Etisalat (Mobily) said on Sunday it has discontinued its management agreement with its founder, Emirates Telecommunications, also known as Etisalat.

The agreement expired on Friday "and Mobily and Etisalat Group agreed on the non-renewal of the same", Mobily said in a bourse statement. "

'via Blog this'

MIDEAST STOCKS-Saudi surges on budget, Saudi Electricity leaps | Reuters

MIDEAST STOCKS-Saudi surges on budget, Saudi Electricity leaps | Reuters:
"Saudi Arabia's stock market surged in early trade on Sunday in response to the release of the 2017 state budget, which includes an increase in government spending next year to support flagging economic growth.

The Saudi stock index added 1.1 percent to 7,167 points in the first 15 minutes, nearing technical resistance on this year's peak of 7,235 points, hit earlier this month.

Utility Saudi Electricity jumped 6.6 percent after the government said in the budget it would raise domestic fuel and electricity prices by unspecified margins later this year."

'via Blog this'

Online retail to shake up UAE’s bricks-and-mortar sector | The National

Online retail to shake up UAE’s bricks-and-mortar sector | The National:
"Online retailers could be a new threat to the UAE’s bricks-and-mortar retailers next year. Retailers were under pressure this year from a sluggish economy and global macro conditions that made the UAE an expensive place to shop for many international visitors. The hope that 2017 may be an easier year is complicated by the rise of home-grown online retail channels that further threaten the status quo.


The trend crystallised at a press conference in Dubai on the noon-hour of November 13.

That is when Mohamed Alabbar, the billionaire chairman of Emaar Properties, said that next month a group of investors would launch Noon.com, an online retailer carrying 20 million products. To give that number some relevance, your typical mall carries about 1.5 million items, and Amazon, the world’s biggest online retailer, carries about 20 million products."

'via Blog this'

Sellers dominate UAE markets as volume evaporates | GulfNews.com

Sellers dominate UAE markets as volume evaporates | GulfNews.com:
"Last week the Dubai Financial Market General Index (DFMGI) was down by 37.13 or 1.04 per cent to close at 3,517.33. There were 16 advancing issues and 20 declining, while volume fell to a seven-week low. To date the index is up 14.8 per cent for 2016.
The DFMGI continued to pull back off the new 2016 high of 3,658.61 hit two weeks ago as it closed below the prior week’s low on a weekly basis. A bullish breakout was triggered on the approach to that high as the index was moving out of a large rectangle consolidation pattern. So far though the breakout shows signs of failure that should lead to a deeper retracement than what has been seen so far.
A decline below last week’s low of 3,490.66 signals a continuation of the decline. The first support target has been around the 38.2 per cent Fibonacci retracement at 3,479.85, not too far below last week’s low. Also, the 21-day exponential moving average (ema) is at 3,475.40 and it too represents a potential support level. This provides a clear tight range from 3,479.85 to 3,475.40 as the next target. Therefore, a decisive drop and daily close below that range increases the likelihood that the DFMGI could fall further before seeing much of a bounce or recovery. Otherwise, support would be seen in this price range leading to at least a stall if not a bounce."

'via Blog this'

Saudi Arabia Planning to Sell 49% of Aramco, Eqtisadiah Says - Bloomberg

Saudi Arabia Planning to Sell 49% of Aramco, Eqtisadiah Says - Bloomberg:
"Saudi Arabia is planning to sell almost half of Saudi Arabian Oil Co., the world’s largest oil company, al-Eqtisadiah reported.

A 49 percent stake will be sold within 10 years, according to the Riyadh-based newspaper, which cites an unidentified senior government official. Deputy Crown Prince Mohammed bin Salman said in April that an initial public offering is planned for 2018, or even a year earlier, with the country planning to sell less than 5 percent.

Saudi Arabia, under pressure from lower crude prices, has been planning the share sale as part of an effort to generate revenue and reform its economy. The government hopes to raise about $100 billion from the IPO of its flagship asset. Saudi Arabia’s Public Investment Fund will use the proceeds, and eventually control more than $2 trillion and help wean the kingdom off oil."

'via Blog this'

Sovereign-Wealth Funds Threatened by Government Spending - WSJ

Sovereign-Wealth Funds Threatened by Government Spending - WSJ:
"Kazakh President Nursultan Nazarbayev says the country’s sovereign-wealth fund has the money to help wean the central Asian nation off its dependence on oil revenues and build an economy of entrepreneurs.

The 76-year-old president, who led Kazakhstan to independence from the Soviet Union 25 years ago, earlier this year told visitors to the new capital city he built that “Kazakhs have never lived as well as they live today” and the nation’s savings help maintain living standards.

But since Mr. Nazarbayev created the so-called National Fund in 2000, his government has withdrawn $83 billion from it, according to a Wall Street Journal analysis of data from Kazakhstan’s central bank that was corroborated by the International Monetary Fund. The National Fund has a balance of $61 billion as of Nov. 30, down 21% from its peak in August 2014."

'via Blog this'

Chinese firms face competition to maintain role in developing Iranian oilfields | Reuters

Chinese firms face competition to maintain role in developing Iranian oilfields | Reuters:
"Iran plans to ask international oil companies to bid for the second phase of development of its Yadavaran and North Azadegan oilfields, a senior official said on Saturday.

That means Chinese firms China National Petroleum Corp (CNPC) [CNPET.UL] and Sinopec (0386.HK), which have played a leading role in developing the fields until now, will have to compete with other firms if they want to maintain that position.

"CNPC would like to extend its North Azadegan contract, but we have announced that ...they should take part in the bidding for a new contract," Gholamreza Manouchehri, deputy head of the National Iranian Oil Company (NIOC), was quoted as saying by state news agency IRNA."

'via Blog this'

Saturday, 24 December 2016

Friday, 23 December 2016

Barclays refuses to settle with US DoJ over 'craptacular loans' | Business | The Guardian

Barclays refuses to settle with US DoJ over 'craptacular loans' | Business | The Guardian:
"Barclays is refusing to settle with the US Department of Justice over allegations it deliberately sold mortgage bonds to investors that it knew contained “craptacular loans”.

The DoJ’s legal filing outlines an array of colourful descriptions of the types of mortgages that it alleges were used by Barclays to package up in bonds – known as residential mortgage bond securities – which could be sold on to investors.

It accuses Barclays of selling investors RMBS “backed by loans it knew were made to borrowers who were not creditworthy and which were supported by house appraisals it knew were inflated”."

'via Blog this'

Riyadh speeds reforms alongside energy price rises

Riyadh speeds reforms alongside energy price rises:

"Saudi Arabia will gradually link domestic energy prices to international benchmarks over the next few years as the kingdom seeks to deepen economic reform and balance its budget by the end of the decade.

Speaking at a press conference to announce the budget for 2017, Khalid al-Falih, energy minister, said that poorer Saudis hit hard by the end to subsidies on utilities and fuel would be compensated with monthly cash deposits.

Domestic price rises come after an initial round of subsidy reforms were announced a year ago. Along with a cut to public sector allowances, the measures have eased fiscal strain and allowed Riyadh to trim state expenditure by a quarter over two years."



'via Blog this'

EU warns Trump not to destroy Iran nuclear deal

EU warns Trump not to destroy Iran nuclear deal:

"European governments are quietly warning the incoming Trump administration that the US will get the blame if any new economic sanctions on Iran lead to the collapse of the 2015 nuclear deal.

European officials have told the Trump team and Republicans in Congress that there would be little appetite within the EU for a new campaign of international pressure on Iran if the US took steps that precipitated the end of the agreement.

The warnings underline the potential for the Iran deal to become a sharp point of contention between the Trump administration and its western European allies. France, Germany and the UK were all involved in the negotiations, which saw Iran receive sanctions relief in return for limitations on its nuclear programme."



'via Blog this'

Energy poised to be year’s big winner in turnround

Energy poised to be year’s big winner in turnround:

"What a difference a year makes. Having ended 2015 as the worst performing sector on the S&P 500, energy stocks are on track to become this year’s biggest winners as this month’s rally in crude prices further extended the sector’s gains.

Despite falling 0.2 per cent on Friday, the S&P 500 energy index is still up more than 25 per cent this year, making it the top gainer among the 10 main sectors tracked on the S&P.

The index has jumped 12 per cent since early November after it appeared increasingly likely that Opec would be able to reach an agreement to cut oil production."



'via Blog this'

Putin: Glencore, Qatar ‘complete deal’ for Rosneft stake

Putin: Glencore, Qatar ‘complete deal’ for Rosneft stake:
"Glencore and Qatar’s sovereign wealth fund have completed their deal to buy 19.5 of Russian state-run oil giant Rosneft, Russian president Vladimir Putin announced.

Speaking at an annual press conference on Friday, Mr Putin said that “foreigners” had “transferred the money into the Russian budget in full.” The deal is worth Rbs700bn ($11.5bn).

The deal as announced two weeks ago would see Glencore and Qatar contribute EUR2.8bn of their own capital, with the rest to come from Italian bank Intesa and a consortium of Russian lenders."

'via Blog this'

What We Learned From Interviews With Four Top Saudi Officials - Bloomberg

What We Learned From Interviews With Four Top Saudi Officials - Bloomberg: "Saudi officials followed the kingdom’s most detailed budget in recent history by briefings on key plans. Four top officials gave interviews to Bloomberg News in Riyadh. Here are some of the key comments:


Finance Minister Mohammed Al-Jadaan

The newly-appointed minister said the kingdom will “most likely” tap debt markets in the first quarter of next year after raising $17.5 billion in October in the biggest ever emerging market bond sale this year. The government has met with banks to discuss the potential sale of Shariah-compliant bonds, or sukuk, in the first quarter to help plug its budget deficit, according to five people familiar with the matter.
"

'via Blog this'

U.S. crude settles at 17-month high after small, pre-holiday gain | Reuters

U.S. crude settles at 17-month high after small, pre-holiday gain | Reuters:
"U.S. oil prices closed at a 17-month high on Friday in quiet trade ahead of the Christmas and New Year holiday week, even though the gain was small, as the market waits to see how OPEC manages its planned output cuts with Libya expecting to boost production.

Despite the 17-month high in U.S. futures, prices were little changed on Friday in a market that closed early for the Christmas holiday.

Brent LCOc1 futures gained 11 cents, or 0.2 percent, to settle at $55.16 a barrel, while U.S. West Texas Intermediate (WTI) crude CLc1 gained seven cents, or 0.1 percent, to settle at $53.02, its highest close since July 2015."

'via Blog this'

World’s largest hedge fund to replace managers with artificial intelligence | Technology | The Guardian

World’s largest hedge fund to replace managers with artificial intelligence | Technology | The Guardian:
"The world’s largest hedge fund is building a piece of software to automate the day-to-day management of the firm, including hiring, firing and other strategic decision-making.

Bridgewater Associates has a team of software engineers working on the project at the request of billionaire founder Ray Dalio, who wants to ensure the company can run according to his vision even when he’s not there, the Wall Street Journal reported."

'via Blog this'

US alleges Barclays mortgage securities fraud - BBC News

US alleges Barclays mortgage securities fraud - BBC News:
"The US Department of Justice is suing Barclays for alleged mortgage securities fraud.
It claims that Barclays misled investors about the quality of loans backing securities in the run-up to the financial crisis.
Barclays rejected the claims, saying they were "disconnected from the facts"."

'via Blog this'

Thursday, 22 December 2016

Saudi Arabia’s Energy Minister Sees Oil Recovering on OPEC Cuts - Bloomberg

Saudi Arabia’s Energy Minister Sees Oil Recovering on OPEC Cuts - Bloomberg:
"Oil prices are set to recover next year as OPEC fulfills its agreement to cut output, halting the slump that battered the global oil industry, Saudi Arabia’s energy minister said.

The kingdom sees no need for additional production cuts on top of the curbs pledged in recent weeks by OPEC and 11 other oil-producing countries, Khalid Al-Falih said at a ceremony to announce the annual budget in Riyadh. The intervention is intended only to “nudge along” the re-balancing of an oversupplied global oil market, he said in a Bloomberg interview.

“I’m very optimistic that next year will see economic recovery and a recovery of oil markets,” Al-Falih said. Prices, unsustainable at current levels, will also need to rise to encourage investment in the new supplies needed in coming years, he said. Crude will balance somewhere between $50 and $100 a barrel, he said."

'via Blog this'

Saudi to gradually raise fees to employ foreign workers: finance minister | Reuters

Saudi to gradually raise fees to employ foreign workers: finance minister | Reuters:
"Saudi Arabia will gradually increase the monthly fees paid by companies in the kingdom to employ foreign workers, starting from 2018, Finance Minister Mohammed al-Jadaan told a press conference on Thursday.

The level of fees will depend on the proportion of foreigners in each company's workforce, the minister added."

'via Blog this'

MIDEAST STOCKS-Saudi edges up before budget, Egypt's rise slows | Reuters

MIDEAST STOCKS-Saudi edges up before budget, Egypt's rise slows | Reuters:
"Saudi Arabia's stock market edged up on Thursday before the release of the kingdom's state budget for 2017, while Egypt's uptrend slowed. Other Gulf markets were mixed in modest trading volumes.

The Saudi stock index added 0.4 percent. Much activity focused on second-tier stocks such as Saudi Printing and Packaging, which jumped 10 percent.

Saudi Electricity climbed 0.7 percent. Its profits rose in the wake of the 2016 state budget, which raised utility fees as well as domestic fuel prices. The company reported a 50.8 percent jump in third-quarter net profit."

'via Blog this'

Saudi Arabia's Economic Overhaul Bears Fruit as Deficit Narrows - Bloomberg

Saudi Arabia's Economic Overhaul Bears Fruit as Deficit Narrows - Bloomberg:
"Saudi Arabia vision to wean itself off of oil is promising to show green shoots.

In the most detailed budget in its history, the kingdom outlined on Thursday a strategy to balance its books by 2020 by bolstering revenues from non-oil industries to 50 percent and containing growth in spending. The plans are a culmination of a year that saw the biggest overhaul Saudi history, as the world’s biggest oil exporter pledged to boost the role of private businesses and reduce some state safety nets.

Austerity measures including cutting fuel subsidies and lowering wages of public employees helped the kingdom narrow its budget deficit in 2016 to 297 billion riyals ($79 billion), below official forecasts, the Finance Ministry said in a statement on its website. Next year, the shortfall will drop another 33 percent to 198 billion riyals even as government spending increases by a projected 8 percent, to 890 billion riyals.
"

'via Blog this'

U.A.E. Expects Oil Prices to Rise More on Global Production Cuts - Bloomberg

U.A.E. Expects Oil Prices to Rise More on Global Production Cuts - Bloomberg:
"Oil prices may rise even more once investors see that OPEC and other major producers are fulfilling an agreement to cut production to curb the global glut, United Arab Emirates Oil Minister Suhail Al Mazrouei said.

OPEC is committed to the decision to reduce output and it’s too early to talk about any additional steps it may take, Al Mazrouei told reporters in Abu Dhabi. Eleven non-OPEC nations said Dec. 10 they will reduce output by 558,000 barrels a day, adding to a Nov. 30 OPEC pledge to cut 1.2 million starting in January.

“When the market sees the agreement is being implemented, and we hope it will be an effective agreement that will be implemented, and when they see the reduced supply in the market, I am sure this will be positive” for prices, Al Mazrouei said."

'via Blog this'

Exclusive: Commerzbank joins peers in paring back services to Gulf | Reuters

Exclusive: Commerzbank joins peers in paring back services to Gulf | Reuters:
"Commerzbank (CBKG.DE) has told customers in the Gulf it will no longer process their transactions in euros, four Gulf banking sources say, joining other big banks that cut such services after being fined for dealings with Iran.

Major U.S. and European peers have been tightening risk controls in the region after U.S. regulators imposed billions of dollars of penalties on banks in recent years over lapses relating to money laundering and terror financing.

The Gulf, as a close neighbor of Iran and Syria which are subject to U.S. sanctions, has come under close scrutiny from regulators at the same time as an oil price slump has made doing business in the region less profitable."

'via Blog this'

Factbox: Major economic policies and targets detailed in Saudi 2017 budget | Reuters

Factbox: Major economic policies and targets detailed in Saudi 2017 budget | Reuters:
"Following are major economic policies and targets described in Saudi Arabia's 2017 state budget.

ENERGY SUBSIDIES: The government plans to gradually phase out subsidies on energy, although needy citizens will receive "direct cash support" to help them manage, the budget statement said without specifying when this would happen.

DEBT: Over the next four years, Saudi Arabia plans to diversify its debt sales, both domestically and internationally, to include sukuk. It will also seek to sell instruments denominated in different currencies, depending on market demand and conditions.

PRIVATISATIONS: The National Center for Privatization will determine in 2017 the possibility of privatizations in various sectors including public utilities, sports, health, education, transport and municipal services."

'via Blog this'

There are reasons for investors to cheer ETFs

There are reasons for investors to cheer ETFs:
"So, is the smart money with ETFs? This month we have done our best — in the Age of the ETF series — to lay out the pros and cons of the most successful investment innovation of our time. Being journalists, and with a need to act as watchdogs, we have tended to err on the side of the negative and ask, “What could possibly go wrong?” There are no apologies for that.

But let us take a look at what ETFs do offer. They provide all the benefits of passive management. They allow much more trading. And that greater trading has created jobs for a whole ecosystem around them: brokers who sell them to the public, stock exchanges, and the market-makers and brokers who ensure they stay in line with their benchmark.

That trading is excessive. In aggregate, those who trade heavily give themselves a worse deal. As shown by Jack Bogle, the Vanguard founder and a lasting sceptic of ETFs, the average investor in ETFs does worse than the fund itself. This is because the trading, usually mistimed, generally succeeds only in sparking value."

'via Blog this'

Dubai budget: emirate to boost infrastructure spending for Expo 2020 | The National

Dubai budget: emirate to boost infrastructure spending for Expo 2020 | The National:
"Dubai plans to increase infrastructure spending next year as the emirate unveils a Dh47.3 billion budget to create thousands of jobs.

The construction sector will receive a major boost from a 27 per cent jump in spending as the emirate prepares for Expo 2020.

The budget shows a 3 per cent rise in Government expenditure, state news agency Wam reported yesterday, while revenues will be lower owing to the restructuring of the budget. It anticipates a deficit of Dh2.5bn, representing 0.6 per cent of GDP."

'via Blog this'

Saudi Arabia Said to Consider Sale of Islamic Bonds Next Quarter - Bloomberg

Saudi Arabia Said to Consider Sale of Islamic Bonds Next Quarter - Bloomberg:
"Saudi Arabia has met with banks to discuss the potential sale of shariah-compliant bonds in the first quarter to help plug its budget deficit, according to five people familiar with the matter.

The country is considering selling sukuk, or Islamic bonds, with different maturities to the five-, 10- and 30-year debt it sold in October, one of the people said, asking not to be identified as the information is private. This could include tenors of seven and 16 years, the person said. No final decisions on the size or timing have been made, the people said.

Saudi Arabia raised $17.5 billion in October in the biggest ever emerging market bond sale, attracting $67 billion of bids, people familiar told Bloomberg at the time. The kingdom is turning to debt markets to help fill a budget gap estimated by the International Monetary Fund to reach 13 percent of economic output this year, before dropping below 10 percent in 2017. Former Finance Minister Ibrahim al-Assaf said in October that the country might follow its first international debt issuance with an Islamic bond sale."

'via Blog this'

MIDEAST STOCKS-Gulf barely moves before Saudi budget | Reuters

MIDEAST STOCKS-Gulf barely moves before Saudi budget | Reuters:
"Gulf stock markets barely moved in quiet, early trade on Thursday before the announcement of Saudi Arabia's 2017 state budget, expected in the afternoon.

The Saudi stock index edged up 0.1 percent in the first 40 minutes. Much activity focused on second-tier stocks such as Saudi Printing and Packaging, up 4.9 percent, although Saudi Electricity rose 0.9 percent.

Saudi Electricity's profits rose in the wake of the 2016 state budget, which raised utility fees as well as domestic fuel prices. The company reported a 50.8 percent jump in third-quarter net profit."

'via Blog this'

Wednesday, 21 December 2016

Brent curve signals oil tanks will start emptying in second half of 2017: Kemp | Reuters

Brent curve signals oil tanks will start emptying in second half of 2017: Kemp | Reuters:
"OPEC and non-OPEC oil producers have agreed to reduce their combined output by more than 1.7 million barrels per day for six months from January 2017.

But the agreement contains a provision that it can be extended for a further six months, subject to market conditions.

Oil traders are betting on an extension, with most of the rebalancing of the oil market expected to occur in the second half of 2017."

'via Blog this'

Saudis to Unveil Roadmap to Balanced Budget, Possible Surplus - Bloomberg

Saudis to Unveil Roadmap to Balanced Budget, Possible Surplus - Bloomberg:
"Saudi authorities will on Thursday unveil steps to balance one of the highest budget deficits in the Middle East and possibly achieve a surplus in 2020, according to a senior government official with knowledge of the matter.

The plan will focus on bolstering non-oil revenue and will seek to shield middle- and low-income earners from the impact of the planned measures, the official said on condition of anonymity. The economic council chaired by Deputy Crown Prince Mohammed bin Salman devised the plan, the official said."

'via Blog this'

MIDEAST STOCKS-Saudi market rises before 2017 budget, Egypt extends bull run | Reuters

MIDEAST STOCKS-Saudi market rises before 2017 budget, Egypt extends bull run | Reuters:
"Saudi Arabia's stock market rose on Wednesday on the eve of the government's release of its 2017 budget, and Egypt's extended a bull run fuelled by foreign money and last month's float of the Egyptian pound.

The Saudi stock index climbed 0.4 percent, though trading volume shrank to its lowest level in two months as many investors became cautious before the budget announcement.

Sources familiar with budget planning told Reuters the government would reveal substantial progress in cutting the budget deficit from a record high in 2015, and that state spending would be raised to support economic growth. Domestic energy prices are expected to be increased to ease the government's subsidy burden."

'via Blog this'

Saudi Arabia Plans Payouts to Offset Subsidy Cuts in 2017 - Bloomberg

Saudi Arabia Plans Payouts to Offset Subsidy Cuts in 2017 - Bloomberg:
"Saudi Arabia is weighing plans to raise retail fuel prices again next year and will start a cash-transfer program to compensate all but the wealthiest for cuts in universal subsidies as it pursues an unprecedented plan to overhaul the economy.

The government is expected to announce the increase in retail gasoline and diesel prices before the end of the year, a person familiar with the matter said. Families affected by the measures can register for cash transfers from Feb. 1 and the payments will start in June, according to two people familiar with the plan. The two spoke on condition of anonymity because they’re not authorized to release the details.

Government officials weren’t immediately available for comment."

'via Blog this'

Inside Brexit: How Britain lost Europe

Consolidation among UAE brokerages is the need of the hour | The National

Consolidation among UAE brokerages is the need of the hour | The National:
"Some sectors are more stressed than others and the brokerage sector in the UAE is one of them. Just as the UAE is overbanked, it is also overbrokered.

Built on soaring volumes and value traded before the global financial crisis, the industry was aided by heavy retail participation mostly trading for speculative purpose than investing reasons. Lack of investor sophistication meant more volume and value traded and, hence, juicy commissions. No wonder more than 100 players were attracted to set up in what was thought to be a super growth industry. The narrative has changed completely now thanks to the global financial crisis and low oil prices.


Despite its recent rally, the price of a barrel of Brent crude, at US$55.25 yesterday afternoon, is still more than half its peaks of mid-2014. And the Dubai Financial Market General Index is about 43 per cent below its peak level in 2008."

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Etihad Airways to review European investment strategy | GulfNews.com

Etihad Airways to review European investment strategy | GulfNews.com:
"Abu Dhabi-based Etihad Airways is reviewing its strategy of investing in European airlines and is seeking an exit in a shake-up that could lead to the departure of CEO James Hogan, company and industry sources told Reuters on Tuesday.
Etihad saw a strategy to take equity stakes in carriers like Air Berlin, Alitalia and Air Serbia as a way to expand its European network but losses have mounted with Air Berlin and Alitalia failing to turn a profit.
Etihad announced on Sunday it was cutting jobs, with local rival Emirates following a day later in reviewing its workforce as overcapacity and a stronger dollar squeeze earnings."

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UAE construction sector needs to show more patience | GulfNews.com

UAE construction sector needs to show more patience | GulfNews.com:
"Contractors in the UAE shouldn’t look to the new year and an Expo 2020 project ramp-up for an immediate lift in industry fortunes. Whatever gains there are will emerge in a more measured way, says a senior industry source. “At the moment, it doesn’t feel like a whole barrage of projects,” said Colin Timmons, CEO at Al Naboodah Construction Group. “There will be work other than Expo 2020.
“Tenders are coming through, (but) the process from tendering to winning takes a lot of time. Clients want to look at value engineering for the most economic solutions.”
For more than a year now, the construction sector had been waiting on an Expo 2020-induced boost to get ample funds to once again flow into the sector and ease pressure on payment delays and profitability."

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Exclusive: Saudi budget to boost spending, raise domestic fuel prices - sources | Reuters

Exclusive: Saudi budget to boost spending, raise domestic fuel prices - sources | Reuters:
"Saudi Arabia's state budget for 2017, which is expected to be released on Thursday, will boost spending to support economic growth while raising domestic energy prices to ease the government's subsidy burden, sources told Reuters.

The government is expected to announce its budget deficit fell sharply this year to 297 billion riyals ($79.2 billion), the sources, who are familiar with the budget planning, said on Wednesday.

That would allow Riyadh to claim substantial success in its battle to reduce a huge deficit caused by low oil prices. The deficit totaled a record 367 billion riyals in 2015, and the original budget for this year projected a 326 billion riyal gap."

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Saudis Seen Accelerating Sunward Tilt in Charge for Oil Revenue - Bloomberg

Saudis Seen Accelerating Sunward Tilt in Charge for Oil Revenue - Bloomberg:
"Saudi Arabia’s long-awaited drive to free up more oil revenue by shifting to solar power generation is expected to pick up speed next quarter, according to local developers eyeing contracts.

“I’m fully expecting within the first quarter 500 megawatts to come out in tenders and then it’ll ramp up,” said Paddy Padmanathan, the chief executive officer of Acwa Power International in Riyadh. “That will be a game changer for the region.”

The world’s biggest crude exporter also burns more oil than any other country to generate electricity. According to the most recent International Energy Agency figures, the kingdom consumes at least 900,000 barrels a day to keep the lights on -- an amount worth over $16 billion a year based on current oil spot prices. Integrating more solar power onto the Saudi grid could free up more crude for export."

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Franklin Templeton Likes U.A.E., Egypt in Mideast Stocks Outlook - Bloomberg

Franklin Templeton Likes U.A.E., Egypt in Mideast Stocks Outlook - Bloomberg:
"The United Arab Emirates and Egypt are the Middle East stock markets poised to perform best in 2017, said Bassel Khatoun, Franklin Templeton Investments’ chief investment officer for Middle East and North Africa equity. Khatoun, who manages $87 million in stocks from the region out of Dubai, gave his calls on key markets in the region next year in a Dec. 19 interview.

United Arab Emirates -- Overweight

Areas like tourism, finance, hospitality, trade should continue to grow. And the Expo 2020 in Dubai will serve as a concrete deadline for a lot of that infrastructural spending. Most of the liquidity issues in the country will be overcome, and the banks are operating quite healthy balance sheets. Its growing size on MSCI EM will also continue to attract investors."

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MIDEAST STOCKS-Gulf edges up before Saudi budget, Egypt continues bull run | Reuters

MIDEAST STOCKS-Gulf edges up before Saudi budget, Egypt continues bull run | Reuters:
"Gulf stock markets edged up early on Wednesday ahead of the release of Saudi Arabia's state budget for 2017, which is expected on Thursday.

Egypt's stock market continued its bull run.

The Saudi stock index edged up 0.3 percent in the first 90 minutes of trade.

"

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Tuesday, 20 December 2016

ADDED report: Oil price slump likely to continue | GulfNews.com

ADDED report: Oil price slump likely to continue | GulfNews.com:
"The slump in oil prices that began in mid-2014 is likely to continue in the foreseeable future, with oil prices expected to be challenged in the short-term by an increased supply from fracking (the process by which oil and gas are extracted from shale rocks).
According to the latest report by Abu Dhabi’s Department of Economic Development (ADDED) that was released Tuesday, oil prices will also be challenged in the longer term through efficiency gains from solar and battery technology.
“On the supply side, rising unconventional oil production enabled by new technologies and increasing production of biofuels have contributed to excess resources. On the demand side, China’s slowing economic growth has meant a double-digit decline in its import commodity growth. These underlying dynamics mean the slump is likely to continue in the foreseeable future,” the report said.
"

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Deal-making to drive 2017 Middle Eastern banking fee fest | Reuters

Deal-making to drive 2017 Middle Eastern banking fee fest | Reuters:
"A Middle Eastern investment banking fee bonanza should extend into 2017, spurred by a combination of bond and share sales and mergers and acquisitions as the region adjusts to lower oil prices, bankers say.

Deals such as Saudi Arabia's $17.5 billion debut international sovereign issue and the sale of a majority stake in retailer Kuwait Food Co (FOOD.KW) (Americana) to Gulf-based Adeptio have helped banks' earnings, off-setting falls in other regions due to economic uncertainty and volatile markets.

Fees from the Middle East reached $581 million during the first nine months of 2016, an 11 percent rise compared to the same period in 2015, according to Thomson Reuters data, while global fees for these services fell 11 percent to $60.9 billion."

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Exclusive: Financing hitches could delay Hapag Lloyd, UASC shipping tie-up - sources | Reuters

Exclusive: Financing hitches could delay Hapag Lloyd, UASC shipping tie-up - sources | Reuters:
"A merger of German container shipping line Hapag-Lloyd (HLAG.DE) and United Arab Shipping Company (UASC) is likely to take months to complete, partly due to financing issues blamed on a deep industry downturn, sources familiar with the deal say.

Hapag-Lloyd signed a binding agreement with UASC in July to form the world's fifth-largest line, valued at about 7 to 8 billion euros ($7.2-$8.3 billion), by the end of 2016.

But three sources told Reuters that timeline is being held up, partly because some banks want to pull out of loans, particularly to UASC, due to the sector crisis. One source said the sum totaled at least $500 million and could be as much as $900 million."

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MIDEAST STOCKS-Egypt hits record high, Qatar buoyed by $44 bln bank merger plan | Reuters

MIDEAST STOCKS-Egypt hits record high, Qatar buoyed by $44 bln bank merger plan | Reuters:
"Egypt's blue chip stock index surged to a record high on Tuesday while Qatar's market was supported by a potential $44 billion bank merger but other major Gulf bourses were dampened by profit- taking.

Cairo's index jumped 3.4 percent to 12,148 points, exceeding its previous all-time high of 12,039 points reached in April 2008. The index is up 6.6 percent over the last two days and up a spectacular 73.4 percent since the start of the year.

Shares favoured by foreign funds were the top performers, with Global Telecom Holding leaping 12.9 percent. The broader EGX100 index rose 1.0 percent."

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Gulf airline giants face job cuts as growth slows | Reuters

Gulf airline giants face job cuts as growth slows | Reuters:
"Emirates [EMIRA.UL], the world's biggest long-haul airline, and Abu Dhabi's Etihad Airways are reviewing their workforce as overcapacity and a stronger dollar put pressure on earnings.

The cutbacks show how the Gulf airlines' rapid expansion of the past few years is slowing down against a more challenging economic backdrop.

Dubai-based Emirates has offered redundancies to staff working in accounting, finance, IT and other departments in its head-office, sources familiar with the matter told Reuters. The airline did not immediately respond to requests for comment."

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Exclusive: Qatari bank trio in talks for potential $44 billion merger | Reuters

Exclusive: Qatari bank trio in talks for potential $44 billion merger | Reuters:
"Qatari banks Masraf Al Rayan MARK.QA, Barwa Bank IPO.BABK.QA and International Bank of Qatar have begun initial talks for a potential merger, the banks said on Monday, in a deal that would create the Gulf state's second-largest bank.

If the deal goes ahead, it would be a rare example of consolidation among banks in the Gulf, which have previously been reluctant to tie up but are facing challenging conditions due to the impact of lower oil prices on the region's economies.

The trio have begun initial discussions "to create a larger and stronger financial institution with a solid financial position and liquidity to support Qatar’s economic growth", according to a joint statement from the three banks sent to Reuters."

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MIDEAST STOCKS-Qatar supported by $44 bln bank merger plan; other markets dip | Reuters

MIDEAST STOCKS-Qatar supported by $44 bln bank merger plan; other markets dip | Reuters:
"Banking shares in Qatar made strong gains on Tuesday morning after three Qatari banks said they were in talks on a potential $44 billion merger, but other markets in the Gulf retreated on profit-taking.

Masraf Al Rayan jumped 4.4 percent after the Islamic lender announced it was in initial talks with Barwa Bank IPO-BABK.QA and privately listed International Bank of Qatar to merge, in a deal that would create the second largest bank in Doha.

The possible consolidation spurred interest in other lenders, with the largest bank by assets, Qatar National Bank , adding 1.8 percent. The main Qatar equities index was up 0.4 percent."

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Monday, 19 December 2016

New supply to lower Dubai suburban rents in 2017 | The National

New supply to lower Dubai suburban rents in 2017 | The National:
"Dubai rents are set to decline further next year with more than 20,000 new homes entering the market, brokers say.

After having fallen by up to 5 per cent this year in parts of Dubai, rents should drop by another 4 per cent in the suburbs next year amid the supply influx, according to the Core Savills 2017 forecast published yesterday.

Most of the new units are being built outside the city centre. The broker estimates that just 19 per cent of those homes – about 3,800 – are due to be built in the most established and central parts of the city next year."

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